You have two options for investing $500. The first earns 7% interest compounded annually, and the second

Question:

You have two options for investing $500. The first earns 7% interest compounded annually, and the second earns 7% simple interest. The figure shows the growth of each investment over a 30-year period.
(a) Determine which graph represents each type of investment. Explain your reasoning.
4000 3000 2000 1000 + 15 + 25 10 30 Year Investment (in dollars)

(b) Verify your answer in part (a) by finding the equations that model the investment growth and by graphing the models.
(c) Which option would you choose? Explain.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: